Posts Tagged ‘Debt’

What I Did with Credit Card #3

In Uncategorized on January 22, 2010 at 3:12 pm

For the time being, I’ve left Credit Card #3 open and decreased the limit to $500. The thought behind this is to keep the amount of credit available to me at a minimum without closing the account entirely. Once I’ve paid off Credit Card #2 to 75% of its limit, I will cancel Credit Card #3.

I’m really hoping that come May when I check my credit score it will be in the higher bracket. I don’t have a number to compare it to as I simply just order my free credit reports annually from Equifax and TransUnion and they don’t come with a score. But once I do get my score, I will keep track of it yearly to watch it slowly climb up higher.


Debt Update

In Uncategorized on January 13, 2010 at 11:19 am

It’s been awhile since I updated my debt, and this blog. For that I apologize. I don’t have any reason to give you other than that I’ve been busy (typical excuse) and that I have not been motivated to write.

My current credit card debt sits as such:

Starting Amount (April 2009):
Paid Off: $9,155.12
Current Amount (January 2010): $20,877.35

I’ve paid off $9,155.12 of my debt in 9 months, or reduced my debt by 30%, on a salary of $42,000. I also contribute to our mortgage and housing costs (50%) and make regular payments on my car and student loan in addition to contributing to savings.

That makes me feel good.

Student Loan Debt in Ontario

In Uncategorized on November 13, 2009 at 2:03 pm

So, not included in my huge credit card debt is my student loan debt. The reason I don’t include it is because the interest on it is tax deductible, and it is not a high priority for me to pay off. Plus, the total amount of debt to my name would be so large I think it would scare some of you off. Ha! It scares me when I see it.

When I first graduated and OSAP (the Ontario Student Assistance Program – but more like the Ontario Student Ass-whooping Program) contacted me after my six month ‘grace’ period to start repaying my loans, I was making a measly $11/hr and commuting. Needless to say, an additional $300/mth payment was just not going to work. I extended my due date and got a lower monthly payment. Easy peasy.

Looking into my student loans is something I allow myself to do once a year because the principal takes forever to go down. It is depressing. This week I logged in and checked it out. The National Student Loan Service Centre actually improved their website immensely. It is very easy to use, and has some really useful calculators that allow you to punch in how much you want to pay per month and it divides the payment amongst your loans, showing you your months left to D-day. Or when you will be free of your student loan debt. Cool.

While playing around with the numbers, I realized if I could contribute an extra $288 per month to my student loans I would be free of them in less than 5 years. Hey, that actually fits into a foreseeable future financial plan. Not bad. But, since at this point in time my financial focus is on repaying my high interest credit card debt that keeps me up at night, I will revisit this topic again in a year’s time.

In the meantime though, I changed my monthly payments to bi-weekly. I had no idea that was even an option, but it was easy to do with a quick call to the NSLSC and no paperwork was required. Sweet! See you later student loan.


In Uncategorized on October 10, 2009 at 8:00 am

My dates of debt repayment according to my current plan are as follows:

May 2010 – Credit Card #1
Feb 2011 – Credit Card #2
Jan 2013 – Credit Card #3 (LOC)

DEBT FREE DAY (D-DAY): January 2013

If I increase the amount I repay per month by $40, I can move the dates forward like so:

May 2010 – Credit Card #1
Jan 2011 – Credit Card #2
Oct 2012 – Credit Card #3 (LOC)

DEBT FREE DAY: October 2012

My hopes are that my salary will be going up in four months allowing me to increase my monthly debt reduction payment by $340 in total. This would get me out of debt by:

Feb 2010 – Credit Card #1
Aug 2010 – Credit Card #2
Nov 2011 – Credit Card #3 (LOC)

DEBT FREE DAY: November 2011

I’ve decided that I definitely need to move my debt free day up to November 2011, especially if we would like to start our family next year.

Now, keep in mind this payment plan does not include any snowflakes or additional payments I make. Every month I make additional payments on my debt from any income I bring in from my side-hustle (part-time small business). These make a significant impact on my debt reduction and every month I play with the plan (you can use the same spreadsheet as me, found here) adjusting the dates, interest rates, and balances. It is motivating to see the numbers change, the balances go down and the interest rates go down as I re-negotiate my credit card accounts and transfer balances as needed.

My Debt

In Uncategorized on August 6, 2009 at 12:00 pm

Some of you may be wondering what exactly my debt consists of. Well if you want the WHOLE story, there is a lot more than what’s listed here because I have a car loan and a mortgage as well as my student loan and credit card debt. Yep, up to my eyeballs in debt. This is my life.

My first goal in becoming debt free is to get rid of my consumer debt. First of all, credit cards. I started out with 4. One is a line of credit, and three were issued by banks. One has since been paid off entirely – whee! – and the other three are in the snowball. The line of credit has a better interest rate so it is last on my list to get paid off, though the amount on it is really high.

I’ve been toying with the idea of lowering all credit card debts to 75% of my limits so that my credit score will go up. Since it will be taking my three years to pay it all off, I don’t want my score sitting low while I do this. All of the other stipulations for having a good score have been met. If you are curious as to what contributes to your score in Canada here are the points:

* Always pay your bills on time. Although the payment of your utility bills, such as phone, cable and electricity, is not recorded in your credit report, some cell phone companies may report late payments to the credit-reporting agencies, which could affect your score.

I do this. Each payment is made when the bill arrives.

* Try to pay your bills in full by the due date. If you aren’t able to do this, pay at least the required minimum amount shown on your monthly credit card statement.

Always make just a little more than the minimum on all my debts, with the one being focused on getting the majority of my debt repayment amount.

* Try to pay your debts as quickly as possible.

Ha! Trying my best!

* Don’t go over the credit limit on your credit card. Try to keep your balance well below the limit. The higher your balance, the more impact it has on your credit score.

I am not over any credit limit, but all are close to maxed. This is where I think I can improve by lowering the balance on all until they are all at 75%. This would change my debt repayment snowball, but I’m not sure how else to do that…?

* Reduce the number of credit applications you make. If too many potential lenders ask about your credit in a short period of time, this may have a negative effect on your score. However, your score does not change when you ask for information about your own credit report.

I haven’t had any inquiries in quite some time.

* Make sure you have a credit history. You may have a low score because you do not have a record of owing money and paying it back. You can build a credit history by using a credit card. See the next section to find out how.

Oh, I have a history all right!

What do you think?

Debt Update

In Uncategorized on July 22, 2009 at 12:30 pm

Here’s an update on my debt – finally!

Starting Amount: $30,032.47

Paid Off: $5,753.65

Current Amount: $24,278.82

Not bad, and I’m on track. I want to pay off another of my debts by the end of the year and I think I can do it. Considering I started this in May, I think I’m ahead of schedule so far!

Since I’ve paid off one card in full, I’m wondering what I should do next.
Do I close the card?
Do I maintain it by charging one thing to it per month and paying it off completely?
What is the best method to help increase my overall credit score?

Any suggestions are welcomed!

Make a Plan and Get on with your Life!

In Uncategorized on June 12, 2009 at 8:54 pm

When I finally fessed up to my debt load, it was overwhelming. And I will admit I was obsessed with the numbers even after I had made a plan and put it into play. It is hard to turn away from them and enjoy life as it happens. It’s funny how something like this can consume you, almost as much as the shopping and consuming, in the buying sense of the word, did in my ‘debt-building’ days. Its like a complete 180!

But you have to make yourself a schedule for your worrying – check your bank accounts once or twice a week, run the numbers through your budget, double-check your credit card bills online once a week – this keeps you on track. Once you have done your checking and double-checking move on! Enjoy your evenings with loved ones, go out with your buddies (within your entertainment budget for the week, of course), take walks in the park, and don’t even once think about the money. Because you’ve done your work, you have a plan you are following, and in between payments to your debt you still need to live your life.

After all, our days on this Earth are not infinite and if we don’t love our lives when we have the chance no amount of money in the world could ever bring these moments back to us.

So go out and enjoy that sunshine!